Greek coalition to plead for leniency on bail-out

Greece will on Thursday begin the uphill struggle of trying to secure
revisions to its mammoth international bail-outs, just hours after ending
its protracted political crisis by forming a coalition government.

Newly appointed Greek Prime Minister Antonis Samaras is sworn in at the presidential palace on Wednesday.Photo: Getty Images

New prime minister Antonis Samaras is sending a representative to Luxembourg for a meeting of eurozone finance ministers that will provide his administration an opportunity to argue its case for leniency.

After three days of talks following Sunday's re-run election, Mr Samaras' New Democracy party agreed to join forces with the socialist Pasok, which finished third, and the smaller Democratic Left led by Fotis Kouvelis.

"With God's help we will do everything we can to take the country out of the crisis," said 61-year-old, US-educated former foreign minister Mr Samaras after his swearing-in at the presidential palace. Panagiotis Pikrammenos, the outgoing caretaker prime minister, told Mr Samaras bluntly: "You have many battles ahead of you, both inside and outside Greece."

As discussions on the cabinet went late into last night, the finance minister was heavily tipped to be Vassilis Rapanos, National Bank of Greece chairman and a former economics professor who served in the economy ministry when Greece joined the euro in 2001.

Yiorgos Zanias, the outgoing caretaker finance minister, was however set to represent Greece in Luxembourg as the meeting came too soon for Mr Rapanos.

Top of the requests Mr Zanias is likely to be a two-year extension for a deadline to find €11.5 billion in public spending cuts by the end of 2014.

Aides to Mr Samaras have said that reductions in sales and corporate taxes and increases to the lowest pensions were also among his priorities, in a bid to alleviate the social hardships deepened by the austerity measures attached to two bailouts totalling €240 billion.

The Eurogroup talks "will be the first big battle on the revision of the bailout agreement", said Evangelos Venizelos, the Pasok leader and former finance minister. With Greece in danger of running out of money in a month, he stressed that the coalition sought "the creation of a framework that will allow us to move to positive growth and to combat unemployment".

Eurogroup chief Jean-Claude Juncker said on Tuesday taht there was scope to discuss "extensions" to Greek austerity measures but not "changing the substance of the agreements". Volker Kauder, the parliamentary leader of Angela Merkel's Christian Democrat MPs, warned Greece that the German parliament, which has a veto over bailouts, was not ready to make any major concessions.